CHAPTER 1

Human Resource
Management
in Organizations

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Learning Objectives
 Understand human resource management and define
human capital
 Identify
how human resource management and
employees can be core competencies for organizations
 Name the seven categories of HR functions
 Provide an overview of four challenges facing HR
today

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Learning Objectives
 Explain
how ethical issues in organizations affect HR
management
 Explainthe key competencies needed by HR
professionals and why certification is important

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Human Resource (HR) Management
 Human resource management: Designing formal
systems in an organization to manage human talent
for accomplishing organizational goals

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Why Organizations Need HRM
 Addressworker engagement, performance, leadership
development, retention
 Manage health care, retirement concerns, hiring, and
educating
 Manage a globalized workforce, diversity,
sustainability, and social media
 Facilitate the sharing of employee knowledge and
expertise

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Why Organizations Need HRM
 Deal with government regulations
 Maintain legal compliance
 Smaller
organizations are progressive in HR
management
 Small organization HR support:
 Needed for same reasons as larger organizations
 Frees line managers for primary duties

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Core Competency
 Core competency: Unique capability that creates high
value for a company
 Differentiates an organization from its competitors
 Is a key determinant of competitive advantage
 HR department focus on using people as a core
competency

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Figure 1-1:
Types of Organizational Assets

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Human Capital
 Human capital: Collective value of the capabilities,
knowledge, skills, life experiences, and motivation of
an organization’s workforce
 Called
intellectual capital to reflect the contributions
of employees:
 Thinking
 Knowledge
 Creativity
 Decision making

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Figure 1-2: Areas in Which Employees Can
Be Core Competencies

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Productivity
 Productivity:
A measure of the quantity and quality of
work done, considering the cost of the resources used.
 Unit Labor Cost: A measure of HR productivity
computed by dividing the average cost of workers by
their average levels of output.

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Figure 1-3: HR Approaches to Improving
Productivity

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Customer Service and
Quality Linked to HR
 Affects organizational effectiveness

Human Resource Management

• Customer • Quality
Service

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Organizational Culture
 Organizational culture: Shared values and beliefs
that give members of an organization meaning and
provide them with rules for behavior
 Evolves over a period of time
 Is constant and enduring
 Constitutes organizational social environment
 Affects service and quality, organizational productivity,
and financial results

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HR Management Functions
 Influenced by forces of external environment:
 Global

 Environmental

 Cultural/Geographic

 Political

 Social

 Legal

 Economic

 Technological
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Figure 1-4:
HR Management Functions

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HR Management Functions
 HR strategy and planning
 Equal employment opportunity
 Staffing

 Talent management and development

 Rewards

 Risk management and worker protection

 Employee and labor relations

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Roles of HR Management
 Administrative
 Clerical administration, recordkeeping, legal paperwork, and policy
implementation
 Major shifts: Use of technology and outsourcing
 Operational and Employee Advocate
 Cooperate with managers to ensure fair employee treatment
 Identify and implement needed programs and policies
 Strategic
 Address business realities
 Focus on future business requirements
 Contribute to devising and implementing success strategies
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Figure 1-5:
Mix of Roles for HR Departments

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HR Management Challenges
 Human Resource Management
 Competition, Cost Pressures, and Restructuring
 Globalization
 A Changing Workforce
 Human Resource and Technology

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Competition, Cost Pressures, and Restructuring
 Job Shifts
 Highest percentage shift in higher-education jobs
 Highest numbers shift in lower-education jobs
 Skill Shortages
 Inadequate supply of workers with the skills needed to
perform the emerging new jobs

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Globalization
 Integration of global operations, management, and
strategic alliances
 Types of global workers
 Expatriate: Citizen of one country working in a second
country and employed by an organization headquartered in the
first country
 Wage comparison
 Wages vary with countries and are influenced by political,
legal, cultural, and economic systems

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Figure 1-7: Hourly Compensation for
Manufacturing Workers (2012)

Source: U.S. Bureau of Labor Statistics, www.bls.gov.

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Globalization –
Legal and Political Factors
 Many nations function under turbulent and varied legal
and political systems
 Role of HR professionals:
 Conducting comprehensive reviews of the political
environment and employment laws before beginning
operations in a country

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Globalization – Challenges for
Global Human Resource
 Strategy

 People

 Complexity

 Risk

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Globalization – Challenges for
Global Human Resource
 Racial/Ethnic Diversity
 Gender in the Workforce
 Aging in the Workforce

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Benefits of Technology
 Improvesadministrative and operational efficiency of
HR functions and reduces costs
 Helps in strategic HR planning
 Supports recruitment, selection, and training
 Contributes to organizational performance through
collection and analysis of HR-related data

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Technology Trends
 Mobile Devices
 Mobile devices are used to access HR info
 Personal devices are allowed to enhance work
 Social Media
 Wikis, blogs, tweets, text messaging, etc.
 Social media is used to communicate within and outside the
organization

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Figure 1-8:
HR and Organizational Ethics

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Ethics Culture and Practices
 Programs that emphasize ethical behavior:
 Written code of ethics
 Ethical behavior training
 Advice on ethical situations
 Confidential reporting systems
 Ethicsincludes corporate social responsibility and
sustainable practices

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Ethics and Global Differences
 Differences in legal, political, and cultural values and
practices in different countries
 Globalemployers must comply with both their home-
country laws and the laws of other countries

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Role of HR in Organizational Ethics
 Legal Question
 Does the behavior or result meet all applicable laws,
regulations, and government codes?
 Ethical Question
 Does the behavior or result meet both organizational standards
and professional standards of ethical behavior?

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Figure 1-9: Examples of HR-Related Ethical
Misconduct

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Sarbanes-Oxley (SOX)Act
 Reduces likelihood of illegal and unethical behaviors
 HRissues: Major concerns are linked to executive
compensation and benefits
 Requires companies to:
 Establish ethics codes
 Develop employee complaint systems
 Have antiretaliation policies for employees who act as whistle-
blowers to identify wrongful actions

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HR Management Competencies
 HR Competencies
 Strategic Knowledge
 Legal Capability
 Administrative Capability
 Operational Capability
 Technology and Usage Abilities

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Figure 1-10:
SHRM HR
Competency
Model

* Applicable only to examinees

testing within the United States
Source: www.shrm.org

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HR Management as a
Career Field
 HR Generalist: A person who has responsibility
for performing a variety of HR activities
 HRSpecialist: A person who has in-depth
knowledge and expertise in a specific area of HR

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Human Resource Professionalism
and Certification
 HR professionals need knowledge in:
 Employment regulations
 Finance
 Tax law
 Statistics
 Information systems
 Specific HR activities

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Human Resource Professionalism
and Certification
 Professional associations and organizations:
 Society for Human Resource Management (SHRM)
 International Personnel Management Association (IPMA)
 WorldatWork Association
 Association for Talent Development (ATD)
 Specific HR activities

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Human Resource Professionalism
and Certification
 Professional certification:
 Professional in Human Resources (PHR)
 Senior Professional in Human Resources (SPHR)
 Global Professional in Human Resources (GPHR)
 SHRM exams and certification
 WorldatWork certifications
 Various certifications for specialists

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.